Rippling vs. Deel Lawsuit: WTF Happens Now? The Future of the Late Stage Private Market

Jason Lemkin and Rory O’Driscoll on why Deel should settle fast, Chime’s Durbin arbitrage edge, and why late-stage ratchets are misunderstood.

• Deel’s counter-claims against Rippling are a sign of losing, not winning — innocent parties don’t flee countries or file massive offsets.
• Chime earns ~1.2% on debit vs. ~0.5% for banks over $10B in assets — the entire business model depends on Durbin Amendment arbitrage.
• Chime last raised at $25B; expected to IPO near $10–12B, yet late-stage investors with full ratchets may still break even on recorrected share counts.
• Late-stage VC risk is almost entirely IRR risk, not loss-of-capital risk — 90%+ of deals at that stage return 1x or more.
• CMOs at SaaStr 2025 are openly eager to replace the bottom 20–30% of their teams with AI, with no regret about cultural impact.
• Anthropic grew annualized revenue from $1B in Q4 2024 to $2B in Q1 2025; OpenAI projects burning another $44B before profitability in 2029.
• Microsoft open-sourcing VS Code signals competitive weakness, not strength — dominant platforms don’t need to be generous.
• If MCP succeeds, apps like HubSpot and Box risk becoming pure databases, instantly commodified by agents that bypass their UX entirely.

2025-05-22 · Watch on YouTube